Even As Dairy Industry Booms, There Are Fewer And Fewer Farms

On Friday, President Obama is scheduled to sign a new farm bill into law. It contains a provision that allows all dairy farms to be part of a safety net. The point is to offset risk when milk prices are too low or feed costs too high. But Abbie Fentress Swanson reports that even in good times, smaller dairy farms in traditional milk producing states are now giving up.

DONNIE DAVIDSON: But these calves here were my babies, and they were all about 2 weeks of age or younger, 3 weeks and younger, when I sold out. So, then that one cow there is the last cow left.

SWANSON: Though his family has been raising dairy cows here since the 1930s, Davidson decided to shut down the dairy after a barn roof collapsed last winter.

DAVIDSON: The barn that fell in was right here. It had two alleys - one alley here and then one alley over there - then we had stalls.

SWANSON: Davidson says he didn't want to spend the money it would take to keep the dairy going. So, instead, he will grow crops and raise a herd of beef cattle.

DAVIDSON: Far as the decline, I think it's just a sign of the times. You've got to get bigger to survive, and all good things come to an end sometime.

SWANSON: According to the US Department of Agriculture, half the country's dairies have gone out of business in just the past decade. Roughly 2,500 dairy operations closed their doors in Missouri alone. Judy and Harlan Borman stopped milking cows in Kingdom City, Missouri, seven years ago. At a dairy association luncheon, they recall a time when the county had plenty of dairy farms.

JUDY BORMAN: Back in the old days, there were 31 dairies in Callaway County. That's where we're from.

HARLAN BORMAN: About every other farm or every third farm, you'd see a dairy farm.

BORMAN: And now there's...

BORMAN: None.

SWANSON: Even as the number of dairies dwindle, milk production is rising. Thanks to advances like robotic milking and selective breeding, the industry is more efficient than ever, producing 20 percent more milk than it did just 10 years ago. But ramping up production is costly and often out of reach for some small dairies.

BOB SCHOENING: To compete on an international scale, you've got to be a certain size to do that.

SWANSON: USDA economist Bob Schoening.

SCHOENING: The assembly costs, getting the milk from the farm to the plant - obviously if you've got a big dairy farm where you can just back up a tractor trailer and fill it up and take it to a plant is going to be a lot more efficient, a lot less expensive to transport, than if you've got to go to 10 farms to get that amount of milk.

SWANSON: While milk production in Missouri has fallen by 38 percent in the past decade, neighboring states like Kansas and Iowa have lured big dairy operations there using tax breaks and arguing that close proximity to feed and processing plants is more efficient. Plus, large dairies are notoriously smelly and as cities expand, farmers want wide open spaces with few neighbors and lenient environmental regulations. All this has dairy farmer Tom Oelriches worried.

TOM OELRICHES: We've got plenty of grass for grazing and we're close to corn and other forages, so Missouri's not a bad state to dairy in. We need a few incentives to keep up with the other states that are offering those same incentives.

SWANSON: But it could be too late for states that are losing milk producers to catch up. Economists predict that global demand for dairy products will break records this year, and that will put more pressure on dairy farms to grow even larger. For NPR News, I'm Abbie Fentress Swanson in Columbia, Missouri.

BLOCK: The story comes to us from Harvest Public Media, a public radio reporting project focusing on agriculture and food production issues. Transcript provided by NPR, Copyright NPR.